Stanislav Bozhenko, bond market expert of Uralsib FC

– Atomenergoprom is interested in long-term financing as this money will be spent on construction and modernization of NPPs

State Atomic Energy Corporation Rosatom is planning to conduct a large loan over its affiliate JSC Atomenergoprom (the company unites civil nuclear enterprises).

This is a significant event for the national nuclear industry. Borrowing of so big money from banks might prove quite problematic especially under present market conditions. So, bonded loan is a very good alternative and the guarantees of Rosatom will ensure comfort for potential investors.

Bonds are an unsecured debt unlike most bank credits and are therefore a more convenient instrument for attracting credit resources. Even though the situation on the domestic bond market is improving, it is yet problematic to attract bonded loans — even for good borrowers — for more than 3 years. Before the crisis it was possible to borrow for more than 5 years. It is obvious that Atomenergoprom is interested exactly in long-term financing as this money will be spent on construction and modernization of nuclear power plants. While placing 5-year bonds the company may offer the investors a put option in some 2–3 years as the other new issuers are doing now.

As on the terms of loan placement 10 documentary interest-bearing inconvertible bond series are planned for emission whereas each bond will be 1,000 RUR. The bond’s maturity is five years. The bonds will be placed during a year starting from the state registration of issue.

The bonds will be placed by public subscription by means of purchase and sales transactions at tenders held by CJSC MICEX. ROSATOM is securing all the bond emissions.

Part of the attracted funds is planned be channeled to refund short-term loans attracted by the industry’s enterprises. Another trend is financing part of investment program for subsidiaries and affiliates in 2009 – 2010. In particular among the fund receivers are JSC Energoatom Concern (implementation of NPPs construction program), JSC TVEL (modernization and renewal of nuclear fuel production), ARMZ Uranium Holding (development of mining assets in Russia and abroad within the set up joint ventures), JSC TENEX and JSC United Company Enrichment Sublimation Complex (modernization and renewal of production facilities with the shift to a new generation of gas centrifuges), and JSC Atomenergomash (investments into nuclear engineering for implementation of the NPPs’ new units commissioning program).

JSC Atomenergoprom provides full production cycle in nuclear power industry consolidating leading enterprises and organizations of the industry (its history is over 60 years) and the experience accumulated over the whole range of NFC and NPP building technologies (at present the issuer’s consolidation perimeter incorporates the largest enterprises of nuclear energy industry namely: Atomredmetzoloto, TENEX, TVEL, Energoatom Concern, separation and sublimate complex enterprises as well as enterprises of engineering and service, development of new technologies, etc). According to the consolidated reporting of the company, the issuer’s revenue in 2008 (disregarding the joining date of subsidiaries and affiliates) was 290.5 bn. RUR, the revenue was 146.5 bn. RUR in the first half of 2009, and the profit was 14.4 bn. RUR.